‘Not for the Faint of Heart’: Why Getting a Marijuana Producer Licence is a Long Shot

The regulatory gates to Canada’s legal marijuana regime are open, but only a crack.

Health Canada has received 1,630 applications for licences to grow or sell medical cannabis as of March 31. Only 43 licences have been approved so far, representing just 2.6 per cent of the total applications.

The seven-stage application process to obtain a licence is “not for the faint of heart,” said Eileen McMahon, who chairs the food and drug regulatory practice at Torys LLP. Compared to other highly regulated industries like pharmaceuticals or medical devices, McMahon said, the rate of regulatory default in Canada’s legal marijuana industry is remarkably high so far.

“I mean, these are very difficult regulatory submissions,” McMahon said. “Lots of complexity, lots of information required, and you could see how easy it would be to get it wrong.”

Of the 1,630 applications to Health Canada, 841 have been returned for being incomplete, and 265 were refused outright. Sixty-nine applications were withdrawn by the applicants, and 414 are still in progress. Some applications could be counted towards the total multiple times if they were resubmitted, according to Health Canada.

“The entire application process can take more than a year to complete,” advises a Health Canada web page that outlines the process.

No guarantees

Applying for a licence from Health Canada is time-consuming, said one person who is reapplying for a licence from the federal health authority after being rejected the first time around. The applicant described a potentially costly process with no guarantee of favourable results. CBC News has agreed not to identify the applicant by name.

The applicant joined a group applying for a licence under the government’s previous regulations in 2013. The would-be marijuana producers spent about $75,000 on consultants and lawyers for that first application, he said, plus hundreds of thousands of dollars more to retrofit a facility for growing.

“The application was rather straightforward. We didn’t really think much of it at the time,” the applicant said.

The group submitted an application in October 2013 and received an application number, then started the process of answering Health Canada’s questions about specific information included in their submission. Those questions included a focus on the applicants’ professional backgrounds.